The Middle East’s renewable energy revolution. Regional trends and insights.

The Middle East is rapidly emerging as a significant player in the global renewable energy landscape, leveraging its abundant natural resources like solar and wind to diversify beyond its traditional reliance on oil and gas. 

The Middle East’s vast deserts and intense solar irradiation make solar power a leading renewable source. Projects like Al Shuaibah and Mohammed bin Rashid Al Maktoum showcase record-low solar electricity prices, enhancing cost-competitiveness against fossil fuels.

The region is positioning itself as a global hub for green hydrogen, with projects like NEOM and plans in Oman (which aims to host five of the ten largest low-carbon hydrogen plants by 2030). This is driven by export potential to Europe and Asia, alongside domestic decarbonization needs.

While solar leads, wind power is gaining traction, particularly in Egypt and Saudi Arabia (e.g., Dumat al-Jandal Wind Farm, the largest in the Middle East at 400 MW). Onshore wind capacity in the region is projected to grow nearly ninefold by 2033.

Governments are backing these initiatives with ambitious targets – Saudi Arabia’s 50% renewable electricity by 2030, UAE’s net-zero by 2050, and the Pan-Arab Clean Energy Initiative aiming for 80 GW by 2030. Over $104 billion in renewable projects are planned across the Middle East and North Africa (MENA), with significant investments already flowing.

Despite the progress, challenges remain. The region’s clean power share is still low (under 5% of the electricity mix compared to a global average of 38.2%), and grid bottlenecks, policy uncertainty, and the intermittent nature of renewables pose hurdles. However, innovations like large-scale battery storage (e.g., Saudi Arabia’s Red Sea project) and smart grid technologies are addressing these issues. The Middle East’s strategic pivot to renewables also promises economic diversification, job creation (thousands of solar and wind jobs), and reduced vulnerability to oil price volatility.

MENA countries have over 110 hydrogen projects, mostly green hydrogen, with ambitious targets like 10 Mtpa by 2030. The region’s renewable energy capacity has surged from 1 GW in 2010 to over 30 GW today, with a target of 131 GW by 2030. Over 110 hydrogen projects have been announced, with 90% focused on green hydrogen. However, uncertainties in global demand and the absence of carbon pricing pose challenges for the sector’s growth, OilPrice reported. 

While geopolitical alignments are shifting significantly in 2025, with uncertain outcomes for energy, the countries of the Middle East and North Africa remain committed to their energy transition targets under the Paris framework. Despite inevitable setbacks in the world’s energy transition, the MENA region still holds great potential to become a global powerhouse. Renewable energy in the region barely existed 15 years ago, with approximately 1 GW installed across MENA. But the past decade has seen remarkable growth with some of the lowest costs of producing renewable power in the world, particularly for photovoltaic (PV). Today, the region’s installed renewable energy capacity is more than 30 GW and growing rapidly.

A new report by the Desertech Industrial Initiative (Dii) think tank, MENA Energy Outlook 2025, documents significant investments already made in new energy during the past ten years. The report looks closely at three critical areas of the energy transition: renewables, hydrogen and energy storage. Major projects and trends were highlighted, showing continuing momentum in the three areas of new energy.

Should all projects now announced, in development and under construction be realized, total installed capacity in 2030 will reach 131 GW, according to the Dii report. The UAE appears as a regional leader with 6.3 GW installed capacity, followed by Egypt (4.6 GW) and Saudi Arabia (4.5 GW). The UAE now hosts three of the largest solar plants in the world, including the Mohammed bin Rashid Al Maktoum Solar Park (MBR solar park) in Dubai planned to build out 5 GW, and other giga-scale projects in operation and under development in Abu Dhabi.

The Kingdom of Saudi Arabia (KSA) is now taking a leading role in the region’s renewables with fast deployment of large-scale projects. KSA has seen a surge in projects announcements, driven by its renewable energy target of 100 to 130 GW by 2030, which would requires 20 GW additions per year, according to the Dii report.

Saudi Arabia is accelerating renewables, with 9 GW under construction and large-scale hydrogen and carbon capture initiatives. Saudi Arabia, although slower to start, is now developing enormous solar plants of 500 MW and more. The country now has a remarkable 9 GW under construction according to the Dii report. The recently completed Ar Rass and Al Shauibah 1 projects added 700 MW and 600 MW respectively to its renewable power capacity. The Al Shuaiba 2 Solar PV project now in development will add an enormous 2030 MW to the country’s capacity.

The country’s hydrogen ambitions are well known, with the world’s largest green hydrogen project now under development at NEOM that is planned to produce 1.2 Mtpa of green hydrogen, powered by 4GW solar and wind power starting next year. The offtake is guaranteed by project partner Air Products, Inc., although the destination of so much relatively costly green hydrogen is currently unclear.

In KSA’s industrial east, the national oil company Aramco is pursuing blue hydrogen with carbon capture projects. The company is working with partners on the development of an enormous carbon capture and storage hub in Jubail, which will serve numerous industries in the area.

Hydrogen development is at an inflection point globally. The regulatory uncertainties and persistent high cost of low-carbon hydrogen have held projects back. The absence of CO2 pricing in MENA countries makes the development of domestic markets difficult.

The European Union’s stated ambition for low-carbon hydrogen, to produce 10 Mt and import 10 Mt by 2030, creates a potential export market for MENA. But the EU will likely have much lower actual demand, between 4 and 7 Mt by 2030, according to the Dii report. Despite the headwinds for hydrogen, MENA countries continue to show commitment with more than 110 announced projects at the end of last year, some 90 percent for green hydrogen. Many of these are combined with significant renewable energy requirements, but realistic timelines for their completion extend well beyond 2030, according to the Dii report.

In total quantity, the MENA countries’ combined targets are to produce 10 Mtpa in 2030, with Saudi Arabia having the most ambitious target. Egypt has the most projects with 29 announced projects, largely the legacy of MoUs signed during COP27 in 2022, with six under construction or to start soon. The UAE has the widest array of clean energy solutions deployed and in planning. The country was just starting fifteen years ago, when a 10 MW PV project was commissioned at Masdar City. That modest start has blossomed into a rapid and ongoing expansion of new energy and nuclear power. The MBR Solar Park is now building its 6th phase adding 1800 MW, while the Al Ajban PV project in Abu Dhabi will be the fourth large utility-scale solar plant in the country, adding 1500 MW to the power grid next year.

The country’s clean energy apparatus is becoming increasingly sophisticated. In January, Masdar announced it will build a huge solar and battery storage plant, combining 5.2GW solar PV with 19 GWh BESS, intended to provide actual baseload power to the grid.  

The UAE also pursues distributed solar power, although large utilities have tended to crowd private players out of the market. The Shams Dubai program has added 600 MW of industrial and commercial solar rooftops since 2015.

In hydrogen, the country is taking an ‘all colors’ approach, with a new national strategy for hydrogen. Masdar is committed to producing 1 Mt (million tonnes) green hydrogen by 2030. The national oil company Adnoc is committed to producing 1 Mt blue hydrogen with carbon capture.

The UAE’s embrace of carbon-free hydrogen for the UAE was confirmed by H.E. Sharif Al Olama, Undersecretary for Energy and Petroleum Affairs, Ministry of Energy & Infrastructure, speaking at World Hydrogen MENA last month. He and other speakers reaffirmed the country’s commitment and described a remarkable array of initiatives and pilot projects. These include a ‘green hydrogen oasis’ strategy implemented at the Ta’ziz and Kezad industrial zones. There are waste-to-hydrogen projects underway, and a green steel plant pilot project of Masdar and Emirates Steel now in operation. Work on making the airports into hubs for sustainable aviation fuel (SAF) is in early planning. Meanwhile, there are ongoing discussions to link the Port of Fujairah on the Arabian Sea with Rotterdam for eventual hydrogen export.  

There is also fascinating work to derive natural hydrogen – ‘white hydrogen’ – from ground wells in the region. Chris Wood, CEO, RAK Gas, described his company’s explorations and its plan to supply the glass and ceramics industry in the emirate of Ras Al Khaimah with white hydrogen by 2030.

In Egypt, new energy continues to be viewed as an economic necessity for a country struggling to meet its internal energy needs. Large solar and wind projects are underway in areas bordering the Gulf of Suez and in the south near Aswan, while a large nuclear plant is under construction with Russian assistance at El-Dabaa on the Mediterranean.  

Emirati and Saudi companies are active in Egyptian clean energy. Recent completed solar projects at Kom Ombo, in Aswan governorate, include a 500 MW plant developed by AMEA Power, and a 200 MW plant developed by ACWA Power.  The country has large PV + BESS projects in planning.

The total installed wind energy capacity in MENA is currently 6.2 GW, with Egypt leading the way, according to the Dii report. The recently completed Guelf of Suez 1 wind project added 250 MW clean power, while other major wind developments are progressing, including the Amunet (500MW) and RSWE Wind (500 MW) projects.

Even more ambitious projects are in planning, with Masdar recently joining local partners to sign a concession for an enormous 10 GW wind power project in Egypt. And at least one of Egypt’s many green hydrogen projects is advancing, with the recent award of Germany’s H2Global to the Egypt Green Hydrogen project, a partnership of the UAE’s Fertiglobe and Norway’s Scatec.

Last month’s conference in Dubai also highlighted progress in Oman, now inaugurating large solar PV projects while its Hydrom agency is opening a third round of hydrogen concession auctions. Hydrom is coordinating nationwide hydrogen infrastructure development including pipelines and high voltage power lines.

The recent Dii report gives updates on Oman, Qatar, Morocco, and other countries, including Mauritania’s admirable efforts. Morocco has more than 2 GW wind installed and continues to add capacity. Qatar, long a laggard in new energy, is planning to build its second major renewable energy project, the 2 GW Dukhan Solar Park.

Taken together, the many projects and momentum toward new low-carbon energy in the Middle East and North Africa are impressive. Renewable energy and storage technologies are making economic sense across the vast region. However, domestic markets for new hydrogen-derived fuels are barely emerging, while export markets in Europe and Asia appear far in the future.

The region’s enormous renewable energy potential, with some of earth’s best solar and wind resources, may remain underdeveloped until countries adopt more advanced financial instruments to support new energy, including carbon pricing and green commodity markets.

Major Projects

1. Mohammed bin Rashid Al Maktoum Solar Park (UAE)  

Located in Dubai, this is the world’s largest single-site solar park based on the Independent Power Producer (IPP) model. It aims to reach a capacity of 5,000 MW by 2030 with an investment of approximately AED 50 billion (around $13.6 billion). Once completed, it’s expected to reduce carbon emissions by over 6.5 million tons annually. This project aligns with the Dubai Clean Energy Strategy 2050, targeting 100% clean energy production capacity by mid-century.

2. NEOM Green Hydrogen Project (Saudi Arabia)  

A joint venture between NEOM, Air Products, and ACWA Power, this is set to be the world’s largest utility-scale, commercially operated green hydrogen facility powered entirely by renewable energy. With a combined capacity of about 4 GW from solar and wind, it will produce up to 600 tons of carbon-free hydrogen daily (in the form of green ammonia) by 2026. This $5 billion project supports Saudi Arabia’s Vision 2030 and is projected to cut CO2 emissions by roughly 5 million metric tons per year.

3. Al Shuaibah Solar Project (Saudi Arabia)  

Developed by the Water and Electricity Holding Company (Badeel) and ACWA Power, this is one of the largest renewable energy projects in the region. Located in Mecca province, it’s expected to power around 350,000 homes by the end of 2025. Saudi Arabia is targeting 130 GW of renewable capacity by 2030, and this project is a key step toward that goal.

4. Gulf of Suez Wind Project (Egypt)  

This 1.1 GW wind farm in the Gulf of Suez and Gabal el Zeit areas is the largest single contracted wind farm in the Middle East and one of the largest onshore wind farms globally. It’s part of Egypt’s push to increase its renewable energy share to 42% by 2030, reducing reliance on gas and oil while saving an estimated $5 billion annually in fuel costs.

5. Al Dhafra Solar Project (UAE)  

A 2 GW photovoltaic project south of Abu Dhabi, developed by TAQA, Masdar, Jinko Power, and EDF Renewables. Scheduled for full operation post-2022, it’s expected to reduce CO2 emissions by over 2.4 million tons yearly, powering around 160,000 homes and contributing to the UAE’s Energy Strategy 2050, which aims for 50% clean energy by 2050.

In summary, the Middle East is undergoing a renewable energy revolution, with landmark projects driving a shift toward sustainability. By harnessing its natural advantages and global partnerships, the region is not only reducing its carbon footprint but also aiming to become a leader in the clean energy economy.

/OilPrice, X, Dii/